Imperfect Competition in Multiproduct Food Industries with Application to Pear Processing

Agricultural product markets often involve relatively few firms processing a farm product into multiple processed products. This market structure prompts concern that processing firms may exercise both oligopsony and oligopoly power. The present paper develops and applies a methodology to test simultaneously for market power in both the raw input market and multiple processed output markets. Application of the methodology to California pear processing indicates the industry has exerted power in both its farm input market and the markets for canned pears and fruit cocktail.